Consider the Implementation of Monetary Policy

question 68

Multiple Choice

Consider the implementation of monetary policy.One difficulty in attempting to stabilize the economy by controlling the money supply is that

• A)firms may be sensitive to changes in the rate of interest.
• B)the Bank of Canada can print more money.
• C)the commercial banks may choose not to hold excess reserves.
• D)the money demand function may be unstable.
• E)the Canadian government requires long-term loans.

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Definitions:

Reducing Tillage

Agricultural practice of minimizing soil disturbance, aimed at preserving soil health and reducing erosion.

Managing Irrigation

The process of applying controlled amounts of water to plants at needed intervals, focusing on conserving water and ensuring its efficient use in agriculture.

Soil Covered

The top layer of the earth's surface composed of mineral particles, organic matter, water, and air, which supports plant life.

Desertification

The process by which fertile land becomes desert, typically as a result of drought, deforestation, or inappropriate agriculture.